The U.S. Securities and Exchange Commission (SEC) has garnered the support of the North American Securities Administrators Association (NASAA) in its ongoing lawsuit against the prominent cryptocurrency exchange, Coinbase. This alliance challenges the narrative advocating for unique regulations crafted for crypto assets in the United States, as opposed to the enforcement of pre-existing rules.
Association of Securities Regulators Endorses SEC’s Standpoint in Coinbase Dispute
The NASAA, an entity consolidating state and provincial securities regulators from the U.S., Canada, and Mexico, recently submitted an amicus brief in favor of the SEC regarding its legal proceedings against Coinbase, a dominant player in the American crypto exchange landscape.
The association emphasized the SEC’s assertion that specific crypto assets available on Coinbase are to be considered securities and, thus, fall under the regulatory purview of the Commission. Furthermore, the NASAA maintained that the renowned Howey test – the established method to ascertain if an asset constitutes a security – should be aptly applied to cryptocurrencies.
NASAA made an appeal to the U.S. District Court Southern District of New York, urging it to “disregard Coinbase’s endeavors to constrict and misinterpret the time-honored legal structure in a bid to circumvent the regulatory responsibilities that all other entities in the country’s securities markets bear.” The association fervently opined:
The Judiciary ought not to amend the Howey test to enable digital asset corporations to sidestep regulatory scrutiny … Nor should it perceive digital assets as being exceptionally distinct.
In a legal complaint initiated in early June, the SEC indicted Coinbase of violating federal securities legislation by illicitly running a brokerage and clearing establishment and facilitating the transaction of crypto assets that are deemed securities without obtaining the necessary national securities exchange registration.
Come August, Coinbase made a plea to the court, advocating for the dismissal of the SEC’s litigation. The crypto exchange alleged that the securities regulator had “transgressed its legitimate jurisdiction,” exhibited “arbitrary decision-making,” and deviated from its preceding understandings of U.S. securities regulations.
Earlier this month, the SEC approached a federal magistrate with a request to deny Coinbase’s bid to quash the lawsuit. In its recent submission, the NASAA underlined that “the SEC’s rationale in this lawsuit aligns seamlessly with the commission’s enduring public stance” as well as with the prevailing securities statutes.
We invite your perspectives on whether the NASAA’s amicus brief might bolster the SEC’s position in the Coinbase litigation. Kindly share your insights in the comments section beneath.
Frequently Asked Questions (FAQs) about SEC Coinbase Lawsuit
What organization has supported the SEC in its lawsuit against Coinbase?
The North American Securities Administrators Association (NASAA) has backed the SEC in its ongoing lawsuit against Coinbase.
What stance does NASAA take regarding crypto assets listed on Coinbase?
The NASAA supports the SEC’s viewpoint that certain crypto assets listed on Coinbase should be classified as securities and are therefore under the Commission’s regulatory domain.
What is the Howey test and how does it relate to the lawsuit?
The Howey test is a well-established method used to determine if an asset qualifies as a security. The NASAA contends that this test should be applicable to cryptocurrencies.
What specific accusations has the SEC made against Coinbase?
The SEC alleges that Coinbase violated federal securities laws by unlawfully operating as a brokerage and clearinghouse, and by facilitating the trade of crypto assets that are classified as securities without registering as a national securities exchange.
How did Coinbase respond to the SEC’s allegations?
In August, Coinbase petitioned the court to dismiss the SEC’s lawsuit, asserting that the regulator overstepped its legal boundaries, acted arbitrarily, and deviated from its previous interpretations of U.S. securities laws.
What has the NASAA mentioned in its recent submission?
The NASAA emphasized that the SEC’s approach in this litigation aligns with the commission’s enduring public stance and with existing securities laws.
More about SEC Coinbase Lawsuit
- SEC’s Official Stance on Crypto Exchanges
- Understanding the Howey Test
- Coinbase’s Response to SEC Allegations
- History of Crypto Regulations in the U.S.
- NASAA’s Official Statement on the Coinbase Lawsuit